Facebook founder Mark Zuckerberg once said: “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking any risks.”
Sad but true, throughout our careers, we are taught to obey the rules, to conform to the opinions and behaviours of others, and to information that supports our views. As time goes by, the pressure grows as we move up the organisational ladder, and by the time we reach high-level positions, conformity has been deeply embedded into us. We carry it into our businesses as we build highly structured management hierarchies.
I’m not saying that all conformity is bad as achieving growth and scale still require a management structure that has a lot to do with accountability, reliability and predictability. Rather, I think that for us to be successful in this disruptive era, organisations need to evolve by striking a balance between adherence to formal and informal rules. As well, we need to balance the management discipline needed to achieve short-term financial results with the agility to quickly seize new windows of opportunity.
In other words, the status quo can be the daunting impediment to disruptive innovation, which essentially is the critical factor for organisations to stay relevant these days.
The term status quo itself is Latin for “the existing order of things”. In the business environment, many leaders know that the status quo will not get their organisations where they need to go. In fact, Rebel Brown, the author of Defy Gravity, has said that businesses that let go of the status quo will be able to rise above their competition.
Surely, we all know that challenging the status quo is as hard as stepping out of one’s comfort zone, since the mere thought of doing so can be intimidating as we all are creatures of habit. The status quo exerts a powerful undertow and the current stakeholders in your life and career will encourage you to avoid changes.
Likewise, most companies talk about change far more than they actually engage in it. One main reason is that they are afraid of making any change out of fear, of the wrong change or of leaving the safety and comfort of the known.
But in this highly competitive world, conforming to the status quo will actually do more harm than good, as eventually it will blind us to the threat of competition that is younger and more agile; hence, we will bypass the opportunities for greater reward.
Disruptive innovation is a high-stakes game with high risk and high rewards. It comes with many rejections and failures but the good news is that failures are the pillars of success. As Winston Churchill memorably put it: “Success is not final, failure is not fatal: it is the courage to continue that counts.”
Now the question is, where do we start as businesses if we want to challenge the status quo?
To start off, I’d say we need to reframe our beliefs. Every business and every industry is built around long-standing beliefs about how to make money. These governing beliefs are often considered inviolable but if we can disrupt ourselves before others do it to us, there’s a high chance of winning.
Rebel Brown has suggested we question ourselves by addressing two of the biggest sacred cows of business:
“(X) is our best and biggest customer”: Sometimes clinging to the cash cow can lead to a complacency that prevents new companies from staying in sync with what the market needs. Companies that become slavish to the needs of one client tend to stop paying attention to changes in the marketplace.
It is true that Company X may represent strong revenue, but with all the extra attention this client commands, does it mean it’s big only in revenue, but not in profits? It may also take our attention away from other customers who could account for as much profit, if the time only on selected big customers can make us myopic to changes in our industries, preventing us from capitalising on other opportunities for growth and expansion.
“It's a huge opportunity”: You’ve just clinched the big deal, the dream client, the huge order, or all of the things that businesses strive for, but do they wind up being that profitable in the long run? We’ll discount, deal and do whatever it takes to get those deals. And once we have them, we rationalise that we’ll make up whatever we spent to get the deal over the lifetime of the contract. We justify the extra effort by thinking that if we can get this, we can also get others, but the reality is that those plans aren’t always sure things.
In sum, companies need to overcome the fear that a new product or channel will cannibalise the existing business. You need to let go or unlearn what you have been holding on to for so long in order to disrupt yourself and not fall back to the status quo.
We have seen what happens to companies such as BlackBerry, MySpace and Nokia, which once had winning formulas but didn’t dare to disrupt their strategies until it was too late. When we feel overly comfortable with the status quo, it can lead to boredom, which in turn can fuel complacency and stagnation.
Arinya Talerngsri is Chief Capability Officer and Managing Director at SEAsia Center (formerly APMGroup) Southeast Asia’s leading executive, leadership and innovation capability development centre. She can be reached by email at arinya_t@seasiacenter.com or www.linkedin.com/in/arinya-talerngsri-53b81aa
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